American dairying faces a considerable range of challenges and great opportunities ahead of the new farm bill.

This was the message of the National Milk Producers Federation this week amid calls for a new Dairy Security Act (DSA) – a voluntary dairy programme, which NMPF Chairman Randy Mooney has said will improve the market for US farmers.

“Our members went through a tough year in 2012, with high feed costs and low milk prices putting the squeeze on farmers across the country,” said Mr Mooney.

Mr Mooney remarked on the encouragement the industry took from Rep. Collin Peterson of the Agricultural Committee, when he reaffirmed his support for the DSA, highlighting spring as the time when farm bill talks will fully recommence.

The importance of a supportive and stabilising DSA has been clearly stressed by the NMPF for the good of producer and processor if the dairy industry is to adapt to a changing national and international market.

This was amplified by Rabobank in a report released this week that concluded California dairy farmers have to think globally and move away from milk marketing orders as a means of price protection.

The report "California Dairies: Getting More Moola," stated that US processors should follow in New Zealand’s footsteps by tailoring products for foreign markets and not simply relying on domestic demand.

Report authors, Vernon Crowder and James DeJong argued that through processors adding value to products for domestic and global markets, the sector can rise from its 2009 slump.

This is already the case for Missouri processors who have received plaudits this week from industry experts at the University of Missouri.

Joe Horner, co-author of a report analysing Missouri’s dairy manufacturing, praised processors for transforming every drop produced into the state into ‘higher-valued products’ and said that the presence of farmer owned cooperatives in the state allows producers to capture this value.

Milk employs 23,000 people in Missouri, worth $1.2 billion in labour income and annually contributing $7.7 billion to state-wide economic output, according to the report.

But the Missouri Dairy Association (MDA) has expressed concerns stating the picture is far from perfect. With only 50 per cent milk self-sufficiency for all Missouri processing requirements and the continually low producer margins, the MDA has also said it is time to ring the dairy policy changes.

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